Financial journalists love to make comparisons and evaluate similar and competing services. It is good that they do – it keeps businesses alert to consumer needs. Typically, surveys and comparisons look at popular issues such as mortgages, fees, and interest rates on savings. These are important, and underline the benefits of the Credit Union not-for-profit model. Banks, of course, do have significant strengths too, such as the ability to loan at higher risk levels, albeit at greater cost to the consumer.
A Niche Market Opportunity
Credit unions have a strong track record in specific sectors like the used vehicle market – highlighted recently by the Credit Union Times. This demonstrates their capacity to lead in niche markets but they should not be complacent. Banks are notoriously sensitive to competition from credit unions, whom they often see as stepping beyond their “community” purpose. Consider an area ripe for expansion: the travel money market.
In theory, banks should be able to take advantage of economies of scale and provide a comprehensive service with attractive exchange rates. However, their larger scale sometimes leads to a one-size-fits-all approach, overlooking the personalized service that credit union members value. Some are competitive in the consumer foreign exchange market but that’s not the general experience. More commonly, banks sell high and buy low to the disadvantage of the customer. Sometimes they are not much cheaper than airport FX booths. In contrast, credit unions have the opportunity to show their difference.
A New Frontier for Credit Unions
Travel money brings real potential for credit unions to excel. They can offer services that align with their community-centric values, while also meeting the needs of the growing number of their members ( including new ones) who vacation abroad. As the US taste for foreign travel continues to grow in 2024, credit unions should not ignore this market.
But they must ensure their service brings benefits to their members as well as their own organisations. This is where a reappraisal of their offering makes sense. What’s needed is an efficient service that suits the consumer as well as improving back office processes. For example, consumers increasingly want easy smartphone access, with click-and-collect functionality, while branches want to keep ordering and distribution in its simplest and least time-consuming form.
An Innovative, User-friendly, Digital Solution
Fortunately, this is where credit unions can access tailored foreign exchange services, such as those delivered by Money 4 Travel from Essiell. This provides highly efficient logistics which make it easier for the user to keep exchange rates competitive. Consumers get convenient access to a wide range of currencies, and secure transactions, all aligned with the ethos of credit unions.
Integrating services like this (the Money 4 Travel integration process is straightforward and requires no system upheavals ) allows credit unions to provide a comprehensive and convenient foreign currency service, enhancing customer experience and loyalty. The move not only meets the rising demand for travel-related financial services but also aligns with the credit unions’ practical and value-led “main street” profile.
Maximizing Consumer Appeal
As the US foreign travel sector continues to thrive, credit unions have a unique opportunity to expand their services beyond traditional offerings. By upgrading their foreign exchange provision with partners like Money 4 Travel, they can improve their member customer experience and strengthen their position in a competitive financial market.
By Declan Morton, staff writer at Money 4 Travel and Essiell.
References
Credit Unions Continue to Lead Used Vehicle Market Share, Credit Union Times, January 24, 2024
Credit union vs. bank: Which is right for you? Yahoo Finance, January 23, 2024
